Why event cancellation insurance is a non-negotiable in 2026

Why event cancellation insurance is a non-negotiable in 2026

By Ryno de Kock, Head of Distribution at PSG Insure

South Africa’s events industry plays a vital role in the economy, bringing together organisers, sponsors, vendors, service providers and thousands of attendees. From large-scale sporting events and music festivals to exhibitions and conferences, these gatherings require months of planning and significant upfront investment. However, despite careful preparation, events remain vulnerable to a range of risks that can force last-minute changes or full cancellation.

For organisers and stakeholders alike, the financial, logistical and reputational consequences of a cancelled event can be severe. This is where event cancellation insurance, or specialised event liability cover, becomes an essential risk management tool.

The high stakes of large-scale events

Hosting a major public event involves substantial costs long before the first attendee arrives. These can include venue hire, marketing, security, equipment rental, staffing, permits and deposits paid to suppliers. If an event is cancelled at short notice, many of these expenses cannot be recovered, while revenue from ticket sales, sponsorships or vendor fees may need to be refunded.

Beyond direct financial loss, organisers also face serious reputational risks. A poorly managed cancellation, even if unavoidable, can damage relationships with sponsors, participants and the public, potentially affecting future events.

A real-world reminder of rising climate-related risks

Last year, one of South Africa’s most popular marathons was cancelled just an hour and a half before its scheduled start due to dangerous wind conditions. More than 24 000 runners had already arrived from all over the world, along with medical teams, volunteers, sponsors and suppliers. Despite extensive planning and safety protocols, the event could not proceed without putting participants at risk.

The incident highlighted just how complex event risk can be. Weather-related decisions must often be made under intense pressure, balancing safety with the financial and operational fallout of cancellation. With climate-related risks becoming more frequent and less predictable, event organisers can also expect increased scrutiny around safety protocols, contingency planning and overall risk mitigation.

Why event cancellation insurance matters

Event cancellation insurance is designed to protect organisers against financial losses arising from circumstances beyond their control. Depending on the policy, cover may include cancellation, abandonment, postponement or relocation of an event due to insured causes such as extreme weather, natural disasters, public authority intervention or the non-appearance of key individuals, and reputational damage.

Importantly, this type of cover can also extend to lost revenue, unrecoverable expenses, and contractual obligations to third parties. For vendors, sponsors or service providers, specialist event liability cover may offer protection if an organiser is unable to meet contractual commitments following a cancellation.

The importance of specialist advice

Event insurance is highly specialised, and cover can vary widely between policies. Common pitfalls include assumptions that standard public liability insurance will respond to cancellation losses, or that weather-related disruptions are automatically covered.

Working with an adviser is critical to ensure that the policy reflects the scale, nature and risk profile of the event. Advisers can help organisers understand exclusions, waiting periods, trigger points and documentation requirements, while also ensuring that all stakeholders are appropriately protected.

With external risks becoming harder to predict, event organisers can no longer rely on contingency planning alone. Event cancellation insurance enables safety-first decision-making without exposing businesses to crippling financial loss. By engaging an adviser early in the planning process, organisers and stakeholders can structure cover that reflects today’s realities and helps safeguard the long-term sustainability of South Africa’s events industry.